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London - British supermarket Sainsbury's on Wednesday posted a sixth straight quarter of declining underlying sales as a fierce price war and record deflation hurt the industry.
The group, which trails market leader Tesco and Wal-Mart's Asda by annual revenue, said sales at stores open over a year fell 2.1%, excluding fuel, in the 12 weeks to June 6, its fiscal first quarter.
That was bang in line with analysts' consensus forecast but worse than a fall of 1.9% in the previous quarter.
Sainsbury's, in common with its major rivals, is battling to win back ground against the discounters Aldi and Lidl through price cuts. All players are also having to deal with record commodity-driven industry price deflation.
The firm has previously guided that it expects like-for-like sales to be negative in the full 2015-16 year.
"Trading conditions are still being impacted by strong levels of food deflation and a highly competitive pricing backdrop," said chief executive Mike Coupe.
"Despite the challenging market conditions, we are confident that we are building on strong foundations and making good progress with our strategy."
In November Sainsbury's outlined plans to cut the dividend and new store openings to fund an extra £150m in lower prices.
It is also investing in improving the quality of its products and expanding its non-food, online and convenience business.
Coupe said he was encouraged by some of the early trends the grocer was seeing in its key trading and operational metrics, notably growth in volume and transactions.
He noted sales growth in Sainsbury's convenience business remained "double-digit", while clothing sales across the group were up over 5%.
Industry data published last month showed that of Britain's big four grocers only Morrisons recorded a rise in sales over the 12 weeks to May 24.
Shares in Sainsbury's, down 24% over the last year, closed on Tuesday at 249 pence, valuing the business at €4.8bn.
